VW to launch ‘vw.os’ operating system in software push

Bloomberg

Volkswagen AG is stepping up the pace of its digital transformation with a plan to pool some 5,000 digital experts into a single unit that will develop “vw.os,” a uniform software operating system across all new models.
Chief Executive Officer Herbert Diess has mapped out a “massive expansion” in software and digital investments, and the manufacturer earlier this year started the rollout of the industry’s biggest automotive cloud with strategic partner Microsoft Corp. With the creation of the Car.Software unit, Volkswagen’s in-house development will rise to at least 60 percent by 2025 from less than 10 percent now, the carmaker said on Tuesday.
“We are platform professionals for hardware and are now transferring this competence to software development,” Christian Senger, head of digital car and services for the VW brand, said in a statement. “We will develop software with uniform basic functions for all group brands, which will allow us to drastically reduce complexity.”
The first vehicle based on vw.os will be the electric ID.3, which will start deliveries next year. From 2025, all new models will use the the system, VW said. Currently, as many as 70 control units with operating software from 200 different suppliers need to be integrated into VW brand vehicles, while the group uses different systems with similar functions, such as for infotainment and navigation.
CEO Diess is undertaking an overhaul to streamline VW’s carmaking empire that stretches from VW brand small cars to top-end Bugattis. Boosting software operations is a critical pa-rt of Volkswagen’s strategy through 2025 to tackle a seismic industry shift toward electric and self-driving vehicles.
The company had said its main car brand will let lapse as many as 4,000 general and administrative jobs while adding at least 2,000 IT positions over the next four years, avoiding layoffs at its German factories as it negotiates a major shift toward electrification and self-driving cars. The move, brokered with VW’s powerful unions, includes job guarantees through 2029, the manufacturer said in a statement. The brand will rely on partial retirement and attrition to help reach targeted staff reductions as it culls models and focuses on new technologies that require fewer factory workers.
With earlier job cuts, VW is on track with a plan announced in March to improve profit by 5.9 billion euros ($6.7 billion) a year, the unit’s chief operating officer, Ralf Brandstaetter, said in the statement. “We are making the company fit for the digital age in a sustainable way.”
The prospect of deeper cutbacks had alarmed VW’s union leaders as manufacturers wrestle with the transformation of sprawling industrial operations. App-based services like ride-sharing and car-sharing are already threatening the industry’s traditional business model of individual car ownership — a trend that may accelerate once self-driving vehicles reach critical mass — and electric cars require fewer parts and workers for assembly.
The extended job guarantee is “an important signal,” VW works council chief Bernd Osterloh said in Wolfsburg, near the company’s headquarters. VW signed a broader labor pact in 2016 to cull 30,000 jobs worldwide, with Germany accounting for 23,000, to generate about 3 billion euros in annual savings.
The VW car brand, which accounts for about half the group’s global deliveries, employs roughly 110,000 workers in Germany out of a global workforce of 663,000 across the Volkswagen group, the world’s largest automaker. The unit has been pushing to rein in bloated expenses to lift profitability that’s trailing rivals like PSA Group.